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What’s the alternative? Pensions? If your retirement is dependent on a pension, and the pension goes belly up, then you’re left with a fraction of what you plan

What’s the alternative? Pensions? If your retirement is dependent on a pension, and the pension goes belly up, then you’re left with a fraction of what you planned for (since PGBC doesn’t cover it all)

brightball 4y ago
The realistic alternative is multigenerational family units sticking together. Grandparents help raise the grand kids instead of day care and baby sitters. Kids take care of their aging parents. Communities pull together to help each other. There are complexities to it, but without a lot of the artificial financial structures that we have in place (loans, insurance, stocks, government programs) that’s probably what society has to revert to and in many ways it’s the most efficient long term way for society to function.
- mschuster91 4y ago
  Outright impossible to do with the demands of employment these days - young people are expected to go wherever the jobs are, they cannot stick around in some backwater rural town to take care of their parents. Not to mention that people these days don't have anywhere close to enough children, and it's pretty immoral to force people to breed like rabbits for their retirement.
  - ldh0011 4y ago
    Children sticking around isn't the only option. My mom intends to follow me once I've found a place to settle down in the next few years. I'll give her extra money which should allow her to live quite well on top of what she has saved and she's already expressed interest in helping with grandkids if I have any (I probably will at some point). Obviously this plan is made much easier by remote work and good earning potential for tech workers and I suppose some parents will be more attached to where they currently live than my mom is. But multi-generational is not outright impossible, I'd wager a significant chunk of the population could pull it off to varying degrees in one way or another.
  - ClumsyPilot 4y ago
    > Outright impossible to do with the demands of employment these days Trylly modern thinking is, if the Market disagrees with Gravity, then Gravity is wrong.
mschuster91 4y ago
> What’s the alternative? Pensions? In Germany, we have a "rollover system" - you pay a government-mandated fixed percentage of your income into pensions system in exchange for pension credits. The contributions from all current payers (plus a sizable chunk of tax money) are then distributed to current pension receivers, and the worth of a pension credit point ("Rentenpunkte") is regularly-ish adjusted for inflation.
- goodoldneon 4y ago
  Is that similar to Social Security in the US? Maybe Social Security is at a smaller scale
  - mschuster91 4y ago
    I'm no expert in US pension schemes to be honest, but I quickly looked up - y'all pay 6.2% each (employer and employee) of your wage, here in Germany it's 9.3% each - and our wages tend to be lower than in the US as well. And yet, we here don't really need private pension savings. It'd be interesting if someone with a better understanding of USSS could chime in for the reasons.
nirimda 4y ago
Ultimately retirement always has the same problem: a retired person wants to consume something today without producing anything today. They can't genuinely save it up: if they packed meat in their 20s and wrote code in their 40s, the meat isn't going to be any good and the code will be deprecated in their 80s. The theory of retirement is that there is some surplus of work being produced which can be redirected to people who are not working. A pension plan or a retirement plan or personal savings effectively causes some of your income to be unspendable today, making it today's surplus for today's retirees (even if it causes the value of a database record in your name to increase). But when you are retired, it doesn't matter if that previous surplus was achieved through a pension plan or a retirement fund or personal savings or the kindness of their children: if there is no surplus today, then you can't have it today. When it happens, perhaps it will look like a bank run or a currency collapse or a crash in the stock market. But those are just the economy's way of telling you your society is already bankrupt; they don't necessarily cause the bankruptcy in the first place. So what is the alternative? Is there one? If you want to eat a steak, either you slaughter the cow yourself, or someone else makes more than they need and chooses to sell it to you. The way a retirement is funded might change whether someone with more than they need choose to sell it to you, but it isn't going to make steaks exist.
- quacked 4y ago
  You are bang on. The question comes down to whether or not you can produce something in exchange for fuel, textiles, shelter, food, medicine, law, and the protection of violent men. If you can't, you have to rely on stashed currency. In the current system, stashing currency slows down the market returns of the people who designed and own the system, so every single facet of life is designed to making stashing currency difficult or ineffective. The only way to care for unproductive populations is to make personal sacrifices and care for them, at a loss/to the detriment of your own possible financial and lifestyle returns.
  - nebula8804 4y ago
    There has got to be another way at beating the system but as it stands how does one get over the fact that inflation would wipe away the value of the currency you are holding? Some argue that bitcoin is the answer but who knows really.
quacked 4y ago
There is no pragmatic alternative. A debt-backed financial system will always fail to adequately provide for unproductive populations (children, elderly, disabled, insane). In fact, every financial system will fail to adequately provide for that population. The only thing that can provide for them is the deliberate actions of productive, able-bodied people, regardless of what financial system everyone is participating in. I have a lot of ideas about what could be done, but it's all armchair revolutionary theorizing.
paulmd 4y ago
Instead of having a thousand tiny pension corps we could just... have one big one. Some kind of Social Security system, perhaps. And yeah social security is running a deficit and will have to reduce payments by a whole 25% or 30% in another 20 years... unless we just remove the payment caps. Wow. Like at the end of the day the resources are present in american society to take care of the elderly in retirement. We are not physically running out of green bean casserole. It's just a question of allocation. At the end of the day the money needs to be allocated and just like day 1 of the social security program, there's going to be a lot of people who don't have time to pay into a system before drawing out. The resources will need to be allocated to pay for the wageslavery of the last 30 years. Boomers are going to get theirs regardless, they will make sure of that, but, they're intent on pulling the ladder up behind them like they've done on every other major social issue. Boomers don't care if Xers or Millenials don't have anything saved up, they got theirs and they got social security on top. But if things don't change, there's gonna be an awful lot of starving grandparents again when X and Millenials hit retirement, cause we don't and they're making sure we won't have social security either.
- 88913527 4y ago
  Social Security was introduced as a solution to the problem of economic security for the elderly. If we fail to meet this goal, and people see the consequences of the failure, it would likely be a bad look for politicians; public support for the program will rise, and the program will be reformed.

brightball 4y ago

The realistic alternative is multigenerational family units sticking together. Grandparents help raise the grand kids instead of day care and baby sitters. Kids take care of their aging parents. Communities pull together to help each other. There are complexities to it, but without a lot of the artificial financial structures that we have in place (loans, insurance, stocks, government programs) that’s probably what society has to revert to and in many ways it’s the most efficient long term way for society to function.

mschuster91 4y ago
Outright impossible to do with the demands of employment these days - young people are expected to go wherever the jobs are, they cannot stick around in some backwater rural town to take care of their parents. Not to mention that people these days don't have anywhere close to enough children, and it's pretty immoral to force people to breed like rabbits for their retirement.
- ldh0011 4y ago
  Children sticking around isn't the only option. My mom intends to follow me once I've found a place to settle down in the next few years. I'll give her extra money which should allow her to live quite well on top of what she has saved and she's already expressed interest in helping with grandkids if I have any (I probably will at some point). Obviously this plan is made much easier by remote work and good earning potential for tech workers and I suppose some parents will be more attached to where they currently live than my mom is. But multi-generational is not outright impossible, I'd wager a significant chunk of the population could pull it off to varying degrees in one way or another.
- ClumsyPilot 4y ago
  > Outright impossible to do with the demands of employment these days Trylly modern thinking is, if the Market disagrees with Gravity, then Gravity is wrong.

mschuster91 4y ago

> What’s the alternative? Pensions? In Germany, we have a "rollover system" - you pay a government-mandated fixed percentage of your income into pensions system in exchange for pension credits. The contributions from all current payers (plus a sizable chunk of tax money) are then distributed to current pension receivers, and the worth of a pension credit point ("Rentenpunkte") is regularly-ish adjusted for inflation.

goodoldneon 4y ago
Is that similar to Social Security in the US? Maybe Social Security is at a smaller scale
- mschuster91 4y ago
  I'm no expert in US pension schemes to be honest, but I quickly looked up - y'all pay 6.2% each (employer and employee) of your wage, here in Germany it's 9.3% each - and our wages tend to be lower than in the US as well. And yet, we here don't really need private pension savings. It'd be interesting if someone with a better understanding of USSS could chime in for the reasons.

nirimda 4y ago

Ultimately retirement always has the same problem: a retired person wants to consume something today without producing anything today. They can't genuinely save it up: if they packed meat in their 20s and wrote code in their 40s, the meat isn't going to be any good and the code will be deprecated in their 80s. The theory of retirement is that there is some surplus of work being produced which can be redirected to people who are not working. A pension plan or a retirement plan or personal savings effectively causes some of your income to be unspendable today, making it today's surplus for today's retirees (even if it causes the value of a database record in your name to increase). But when you are retired, it doesn't matter if that previous surplus was achieved through a pension plan or a retirement fund or personal savings or the kindness of their children: if there is no surplus today, then you can't have it today. When it happens, perhaps it will look like a bank run or a currency collapse or a crash in the stock market. But those are just the economy's way of telling you your society is already bankrupt; they don't necessarily cause the bankruptcy in the first place. So what is the alternative? Is there one? If you want to eat a steak, either you slaughter the cow yourself, or someone else makes more than they need and chooses to sell it to you. The way a retirement is funded might change whether someone with more than they need choose to sell it to you, but it isn't going to make steaks exist.

quacked 4y ago
You are bang on. The question comes down to whether or not you can produce something in exchange for fuel, textiles, shelter, food, medicine, law, and the protection of violent men. If you can't, you have to rely on stashed currency. In the current system, stashing currency slows down the market returns of the people who designed and own the system, so every single facet of life is designed to making stashing currency difficult or ineffective. The only way to care for unproductive populations is to make personal sacrifices and care for them, at a loss/to the detriment of your own possible financial and lifestyle returns.
- nebula8804 4y ago
  There has got to be another way at beating the system but as it stands how does one get over the fact that inflation would wipe away the value of the currency you are holding? Some argue that bitcoin is the answer but who knows really.

quacked 4y ago

There is no pragmatic alternative. A debt-backed financial system will always fail to adequately provide for unproductive populations (children, elderly, disabled, insane). In fact, every financial system will fail to adequately provide for that population. The only thing that can provide for them is the deliberate actions of productive, able-bodied people, regardless of what financial system everyone is participating in. I have a lot of ideas about what could be done, but it's all armchair revolutionary theorizing.

paulmd 4y ago

Instead of having a thousand tiny pension corps we could just... have one big one. Some kind of Social Security system, perhaps. And yeah social security is running a deficit and will have to reduce payments by a whole 25% or 30% in another 20 years... unless we just remove the payment caps. Wow. Like at the end of the day the resources are present in american society to take care of the elderly in retirement. We are not physically running out of green bean casserole. It's just a question of allocation. At the end of the day the money needs to be allocated and just like day 1 of the social security program, there's going to be a lot of people who don't have time to pay into a system before drawing out. The resources will need to be allocated to pay for the wageslavery of the last 30 years. Boomers are going to get theirs regardless, they will make sure of that, but, they're intent on pulling the ladder up behind them like they've done on every other major social issue. Boomers don't care if Xers or Millenials don't have anything saved up, they got theirs and they got social security on top. But if things don't change, there's gonna be an awful lot of starving grandparents again when X and Millenials hit retirement, cause we don't and they're making sure we won't have social security either.

88913527 4y ago
Social Security was introduced as a solution to the problem of economic security for the elderly. If we fail to meet this goal, and people see the consequences of the failure, it would likely be a bad look for politicians; public support for the program will rise, and the program will be reformed.